Note 7. Direct Loans and Loan Guarantees, Non-Federal Borrowers:

DOT administers the following direct loan and/or loan guarantee programs:
(1)  Railroad Rehabilitation Improvement Program
(2)  Transportation Infrastructure Finance Innovation Act (TIFIA) Loan
(3)  Federal Ship Financing Fund (Title XI)
(4)  OST Minority Business Resource Center Guaranteed Loan Program

An analysis of loans receivable, allowance for subsidy costs, liability for loan guarantees, foreclosed property, modifications, reestimates, and administrative costs associated with the direct loans and loan guarantees is provided in the following sections:

Loans Receivable and Related Foreclosed Property, Net:

(Dollars in Thousands)

FY 2004 Loans
Receivable,
Gross		 Interest
Receivable		 Foreclosed Value of
Assets
Related to
Loans
Receivable

Property
Allowance
Direct Loan Programs Prior to FY 1992
(1)  Railroad Rehab Improv  $      30,593  $             981  $               -  $               -  $      31,574
     Subtotal  $      30,593  $             981  $               -  $               -  $      31,574
         
Direct Loan Programs After FY 1991
(1)  Railroad Rehab Improv  $    333,873  $          4,539  $               -  $    (24,382)  $    314,030
(2)  TIFIA Loan        190,162              7,738                   -          (9,114)        188,786
     Subtotal  $    524,035  $        12,277  $               -  $    (33,496)  $    502,816
           
Defaulted Guaranteed Loans After FY 1991
(3)  Fed Ship Fin Fund  $    431,967  $          5,876  $      7,000  $  (375,146)  $      69,697
     Subtotal  $    431,967  $          5,876  $      7,000  $  (375,146)  $      69,697
         
Total Loans Receivable  $    986,595  $        19,134  $      7,000  $  (408,642)  $    604,087

 

FY 2003 Loans
Receivable,
Gross		 Interest
Receivable		 Foreclosed Value of
Assets
Related to
Loans
Receivable

Property
Allowance
Direct Loan Programs Prior to FY 1992
(1)  Railroad Rehab Improv  $      34,962  $             981  $               -  $               -  $      35,943
     Subtotal  $      34,962  $             981  $               -  $               -  $               -
         
Direct Loan Programs After FY 1991
(1)  Railroad Rehab Improv
$ 111,718
$ 2,201
$ -
$ 544
$ 114,463
(2)  Alameda Corridor
$ 400,000
151,842
-
145,380
697,222
(3)  TIFIA Loan
102,622
-
-
(9,115)
93,507
     Subtotal
$ 614,340
$ 154,043
$ -
$ 136,809
$ 905,192
           
Defaulted Guaranteed Loans After FY 1991
(4)  Fed Ship Fin Fund
$ 429,088
$ 5,977
$ 14,000
$ (369,377)
$ 79,688
     Subtotal  $    431,967
$ 5977
$ 14,000
$ (369,377)
$ 79,688
         
Total Loans Receivable  $    986,595
$ 161,001
$ 14,000
$ (232,568)
$ 1,020,823

 

Liability for Loan Guarantees (Present Value Method):

 
FY 2004
FY 2003
Loan Guarantee Programs

Total
Liabilities
for Loan
Guarantees

 Total
Liabilities
for Loan
Guarantees
(3) Fed Ship Fin Fund
$ 378,061
$ 292,740
(4)  OST Minority Business Res
551
536
     Total
$ 378,612
$ 293,276

 

Schedule for Reconciling Subsidy Cost Allowance Balances (Post-1991 Direct Loans)
Beginning Balance, Changes, and Ending Balance
FY 2004 FY 2003
Beginning Balance of the Subsidy Cost Allowance
$ (155,038)
$ (7,876)
Add:  Subsidy Expense for Direct Loans Disbursed during the Reporting
Years by Component:		    
Interest Rate Differential Costs
-
-
Default Costs (net of recoveries)
-
-
Fees and Other Collections
18,333
-
Other Subsidy Costs
-
(1,238)
Total of the Above Subsidy Expense Components
$ 18,333
$ (1,238)
Adjustments:
Loan Modifications
-
-
Fees Received
-
-
Foreclosed Property Acquired
-
-
Loans Written Off
-
-
Subsidy Allowance Amortization
86,876
-
Other
-
-
Ending Balance of the Subsidy Cost Allowance Before Reestimates
$ (49,829)
$ (9,114)
Add or Subtract Subsidy Reestimates by Component:
Interest Rate Reestimate
16,333
-
Technical/Default Reestimate
-
-
Total of the Above Reestimate Components
$ 16.333
-
Ending Balance of the Subsidy Cost Allowance
$ (33,496)
$ (9,114)

Schedule for Reconciling Loan Guarantee Liability Balances (Post-1991 Loan Guarantees)

Beginning Balance, Changes, and Ending Balance

FY 2004 FY 2003
Beginning Balance of the Loan Guarantee Liability
$ (293,276)
   $  (384,288)
Add:  Subsidy Expense for Guaranteed Loans Disbursed during the    
Reporting Years by Component:     
Interest Supplement Costs
-
-
Default Costs (net of recoveries)
3,509
(27,216)
Fees and Other Collections
(27,774)
(34,184)
Other Subsidy Costs
-
-
Total of the Above Subsidy Expense Components  $    (24,265)
$ (61,400)
Adjustments:
Loan Guarantee Modifications
-
-
Fees Received
-
-
Interest Supplements Paid
-
-
Foreclosed Property and Loans Acquired
-
14,000
Claim Payments to Lenders
-
-
Interest Accumulation on the Liability Balance
(16,140)
(15,118)
Ending Balance of the Loan Guarantee Liability Before Reestimates
$ (333,681)
$ (446,806)
Add or Subtract Subsidy Reestimates by Component:
Interest Rate Reestimate
-
-
Technical/Default Reestimate
$ (44,931)
$ 153,530
Total of the Above Reestimate Components
$ (44,931)
$ 153,530
Ending Balance of the Loan Guarantee Liability
$ (378,612)
$ (293,276)

The Federal Credit Reform Act of 1990 divides direct loans and loan guarantees into two groups: (1) Pre-1992 means the direct loan obligations or loan guarantee commitments made prior to FY 1992 and the resulting direct loans obligations or loan guarantees, and (2) Post-1991 means the direct loan obligations or loan guarantee commitments made after FY 1991 and the resulting direct loans or loan guarantees.  The Act provides that, for direct loan obligations or loan guarantee commitments made after FY 1991, the present value of the subsidy costs (which arises from interest rate differentials, interest subsidies, delinquencies and defaults, fee offsets, and other cash flows) associated with direct loans and loan guarantees be recognized as a cost in the year the direct or guaranteed loan is disbursed. Direct loans are reported net of an allowance for subsidy at present value, and loan guarantee liabilities are reported at present value.  Foreclosed property is valued at the net realizable value.  Loans receivable, net, or their value of assets related to direct loans, is not the same as the proceeds that they would expect to receive from selling their loans.

As of June 30, 2004, the Maritime Administration is contingently liable for guaranteed ship and shipyard improvementss loans issued under the Title XI program.  As of the end of the period, there were outstanding $28 million in pre-credit reform loan guarantees and $3.6 billion in issued loans and commitments for post credit reform loans.

There were no default claims on the Government to date in FY 2004 for the Maritime Administration. During FY 2004 to date there were two new loan guarantees issued in the amount of $165.6 million for the Maritime Administration.